Savers face two-year delay to tap pensions
57 Age at which people will be able to access their private pensions from 2028, in line with a rising state pension age
SAVERS planning to dip into their private pensions at the age of 55 will be forced to wait an additional two years from 2028, the Government says.
Anyone aged 49 and under must now wait until they are 57 before being allowed to access their pensions without incurring significant and prohibitive tax charges.
As it stands, savers can withdraw money from their pension pot at 55 in any way they like, including taking 25pc of their savings tax-free. However, the age restriction is intended to be 10 years behind the state pension age – currently 65 but rising to 66 this October, and to 67 between 2026 and 2028. Age limits apply as the Government provides tax relief on money saved via a pension on the basis it is not used before retirement. Savings can be withdrawn pre-55 but tax relief must be paid back.
The Government confirmed the new timeline in an answer to a written Parliamentary question from Labour MP Stephen Timms.
John Glen, Treasury minister, replied by saying the shift to 57 would reflect rising life expectancy, in line with the state pension age.
“[It will encourage] individuals to remain in work while also helping ensure pension savings provide for later life,” he said. “[This change has been made] well in advance to enable people to make financial plans.”